(1) Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2014-09, which resulted in certain changes in the Company’s revenue recognition policies and the presentation of certain revenue sources. The change reduced the barter revenue (and the related barter expense) but did not impact the Company’s current or prior year income from operations, net income, broadcast cash flow, adjusted EBITDA or free cash flow. The discussion about this adoption is on page 4.

(2) Effective January 1, 2018, the Company retrospectively adopted Accounting Standards Update No. 2017-07 which requires pension and other postretirement plans cost (credit), other than service costs, to be presented outside of income from operations. Thus, the income from operations during the three and six months ended June 30, 2017 was decreased by a pension and other postretirement plans credit of $3.2 million and $5.8 million, respectively.

(3) Definitions and disclosures regarding non-GAAP financial information including reconciliations are included at the end of the press release.

Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Media Group commented, “Nexstar’s financial growth momentum and focus on shareholder returns was evident again in the second quarter as we delivered another period of record results with top line, bottom line, and cash flow metrics exceeding consensus expectations. The 5.5% rise in second quarter net revenue reflects solid television advertising growth as well as continued retransmission and digital revenue growth. Reflecting these factors, Nexstar posted record second quarter BCF, adjusted EBITDA and free cash flow with these metrics growing 13.5%, 15.3% and 6.6%, respectively on a year-over-year basis. Furthermore, our enterprise-wide focus on efficiency and operating disciplines enabled us to bring about 22% of every net revenue dollar to the free cash flow line.

“Our commitment to apply our growing free cash flow to drive shareholder returns was also evident again in the second quarter as we allocated a total of approximately $84 million to return of capital and leverage reduction initiatives. During the quarter, we used $16.7 million of cash from operations to repurchase 250,000 Nexstar shares, paid our twenty-second consecutive quarterly cash dividend which amounted to $17.2 million, and reduced debt by $50.6 million. With $269.6 million of year-to-date free cash flow and our second half 2018 political revenue pacing very strongly, we remain highly confident in meeting our target for average annual free cash flow in excess of $600 million for the 2018/2019 cycle. At the same time, our recent share repurchase activity has reduced our Class A common stock outstanding (Nexstar’s only class of shares outstanding) to approximately 45.5 million shares.

“Notably, excluding digital revenues and expenses, the 2018 second quarter is the first period since last year’s completion of the Media General transaction where our reported results reflect a pure same-station comparison. Our spot inventory optimization strategies, which are focused on maximizing the political revenue opportunity, served us well in the second quarter as total television advertising revenue rose 3.2%, reflecting record second quarter political revenue which more than offset the reduction in inventory available for local and national spot sales. Reflecting our presence in states with high levels of political spending activity, 2018 second quarter political revenue outpaced our budgets and consensus estimates and rose by 369% over the 2014 period, the last comparable mid-term election cycle. Importantly, despite strong demand from candidates, PACs and other advertisers early in this election cycle, our local and national spot revenue improved on a quarterly sequential basis as our local sales teams continue to generate healthy levels of new business across our markets.

“Combined second quarter digital media and retransmission fee revenue of $340.2 million rose 7.6% over the prior-year period and accounted for 51.5% of net revenue, illustrating again the positive and ongoing shift in our revenue mix and marking growth of 100 basis points in this metric from 2017 second quarter levels. Overall, the year-over-year increase in second quarter non-television advertising revenue reflects recent renewals of distribution agreements with multichannel video programming distributors and the establishment of distribution agreements with OTT providers, the January 2018 accretive acquisition of LKQD, and organic growth across our profitable digital operations. These gains were partially offset by digital revenues included in the comparable 2017 second quarter from certain legacy Media General digital operations that were discontinued in the second half of last year.

“The rise in second quarter station direct operating expenses (net of trade expense) primarily reflects the growth in broadcast ad sales as well as budgeted increases in network affiliation expense and expenses for LKQD. The 6.7% decline in SG&A expense reflects our previously disclosed reclassification of certain digital administrative expenses to corporate expense. Second quarter corporate expense excluding non-cash compensation expense was in line with our expectations.

“Last week, Nexstar entered into definitive agreements to acquire KRBK-TV, the FOX affiliate in Springfield, Missouri and WHDF-TV, the CW affiliate in Huntsville, Alabama for an aggregate purchase price of $19.45 million in accretive transactions. These transactions allow Nexstar to generate incremental advertising and net retransmission consent revenue growth without an increase in our total U.S. television household reach. The purchase price represents a highly attractive multiple of the pro forma contribution to our operating results and the acquisitions are leverage-neutral on a pro-forma basis. Nexstar expects both transactions to close in the fourth quarter of 2018, subject to FCC and other customary approvals. Our proven ability to significantly expand free cash flow by identifying, executing and financing accretive transactions highlights Nexstar's role in the industry as the leading consolidator with an unrivaled record in terms of our execution consistency, capital allocation and the enhancement of shareholder value. In each transaction, large or small, we follow our well-established playbook to enhance the operating results of acquired assets, while delivering exceptional service to the local communities where we operate.

“With our focus on generating free cash flow, we remain disciplined in managing costs, while paying dividends, repurchasing shares and pursuing additional selective accretive acquisitions. In concert with our return of capital policies, we remain focused on actively managing our capital structure as another means of enhancing shareholder value. In this regard, during the first six months of 2018 we allocated approximately $166 million toward debt reduction, opportunistic share repurchases and cash dividends while funding $97 million to acquire fast growing LKQD Technologies for our digital tech stack. With our year-to-date progress on debt reduction and the biggest mid-term election cycle in the Company’s history before us, we continue to expect Nexstar’s net leverage, absent additional strategic activity and discretionary capital returns, to decline to the mid/high 3x range by year-end.

“Nexstar’s organization-wide commitment to excellence in local content for viewers and users as well as unparalleled marketing results for our advertisers has been fundamental to our success and growth. We are executing well on all facets of our business plan, including elevated levels of local original content and service to local viewers and advertisers, continued operational improvements and further optimizing the Company’s capital structure and cost of capital. As we continue to benefit from what are expected to be record levels of political advertising in 2018, the ongoing renewal of our retransmission consent agreements and completion of recently announced tuck-in transactions, we have excellent visibility to delivering on or exceeding our free cash flow targets and a clear path for the continued near- and long-term enhancement of shareholder value.”

The consolidated debt of Nexstar, its wholly owned subsidiaries, Mission Broadcasting, Inc., Marshall Broadcasting Group, Inc. and Shield Media, LLC (collectively, the “Company”) at June 30, 2018, was $4,287.6 million including senior secured debt of $2,719.9 million. The Company’s total net leverage ratio at June 30, 2018 was 4.69x and first lien net leverage ratio at June 30, 2018 was 2.92x compared to a covenant of 4.50x.